Like a former franchisor, and developing franchised my company meant for over 10 years before I just sold it, it seems for me that I’d experienced concerning possible scenario. Most people feel that franchising is really cut and dry; you have a business agreement, people pay most people a certain amount to purchase their franchised outlet, and then they operate the business or store to get a 10 year term with automatic renewals.
Let me give you an example of a crazy thing the fact that happened to us. We had a franchisee who lived on the border of Atlanta and Alabama. We allowed them to have a joint sales area in both states. As a consequence of type of industry we participated in there were different rules and regulations on each side of the border.
Yes, the fact that sounds like a decent business model, then again nothing is ever as straight forward as it appears in the franchising industry. Let me explain. Through the years, I don’t think I ever endured a perfect franchise sale where by everything went exactly correctly; where the franchisee qualified for the loans very quickly, had a perfect resume, had a superb location, didn’t care to make sure you negotiate any terms in the franchise agreement, and almost everything went perfect during the 10 years they were in business prior to renewal.
This is a serious issue, and it happens again than people realize. Franchisors need to demand that the proper procedures are followed, in any other case you run into all sorts of scenarios. Please consider all this and think on.
One day, I occured to fill in for one our area representatives in that section, and I went to go to the franchisee on the Georgia side. When I got there, I actually was talking to his brother-in-law. Apparently he was nowadays running the business, and this franchisee had transferred this company to him without endorsement.
Worse, the person wasn’t following the proper measures which were part of a large navy account we had with a indigenous company. Again because the guy didn’t have to follow are confidential operations manual, of which he never read simply because as he said; “I never signed nothing. ” Nor did he truly go to our franchisor training, which is also required in new managers which are functioning our franchised business model, in the event the owner is not involved in the day-to-day operations.
That really doesn’t happen in franchising, and although franchising is an extremely successful feature for distributing goods, solutions, and products; it isn’t Disneyland. I doubt any business really is.
You see, in the franchise arrangement there are stipulations before you switch the business to someone else, the popular franchisee has to then hint the latest franchise agreement, and have to be approved by the franchisor. It turned out the brother-in-law was not running the business per our confidential operations instructions, he had made quite a few adjustments.
I explained to him that he had to run the business a clear way, and he proclaimed that I was wrong, since he didn’t sign whatever agreement, and he would definitely do it his way. Oh great I thought, now I have a rogue franchisee on my hands, and maybe they are not keeping with the regularity of our brand name.